Silicon Motion Technology Corp., a fabless semiconductor company that designs, develops, and markets universally compatible, high-performance, low-power semiconductor solutions for the multimedia consumer market, announced that it has entered into a definitive agreement to acquire Future Communications IC, Inc. (FCI), a designer of RF integrated circuits (RF ICs) for mobile television and wireless communications that is based in Seoul, South Korea.
Under the terms of the transaction, Silicon Motion will acquire substantially all of of the outstanding common shares of FCI for a total purchase price of $90 million, which will include a combination of cash, Silicon Motion ordinary shares, and options to purchase Silicon Motion's ordinary shares, subject to an adjustment in certain circumstances. Certain outstanding options to purchase FCI shares will be replaced with options to purchase ordinary shares of Silicon Motion. In addition, Silicon Motion has agreed to pay former FCI shareholders up to an additional $12 million in cash upon the achievement of certain operating and financial milestones in 2007. Among the milestones, in order to be eligible for additional payments, the FCI business is required to generate $33 million in revenue in 2007.
"We believe Mobile TV represents the next major wave of innovation for the wireless handset industry and we are very excited that FCI will be joining Silicon Motion," comments Wallace Kou, president and CEO of Silicon Motion. "Korea, where mobile TV is already well on its way to becoming widely adopted by consumers, is the global market leader in the rollout of mobile TV, and is a test bed for the development of other related cutting-edge advances in mobile-handset technologies. This acquisition not only allows us to step into such a favorable environment, it also gives us the opportunity to strengthen our portfolio of solutions for mobile devices, including for multimedia applications."
James Yun, CEO of FCI, adds, "We look forward to joining Silicon Motion and starting the next chapter in our corporate history. By joining Silicon Motion, we believe we can more effectively grow our RF businesses and achieve synergies by reaping the benefits of economies of scale, global sales coverage, and customer relationships, including relationships with leading Taiwanese ODMs."